Cryptocurrency is Taking Over

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Everything is digital now days. Why not money?

Cryptocurrency is just that, a virtual currency.

You may think the system we have now is satisfiable, although, everything we buy today has to go through a bank or credit card company. Cryptocurrencies cut out the middlemen such as banks and credit card companies who take a cut from each transaction while also who rely on our trust to do everything right.

After a while, payments start to add up. On top of that, the security, you trust banks and card companies to withhold crucial and classified credentials.

So is this online currency a potential destroyer of the economy or just an absurd thought of technical dreamland?

Bitcoin, the first decentralized and now most popular cryptocurrency, was created in 2009. There are 21 million bitcoins maximum in existence, 12 million of which have already been found. Bitcoins can be found through mining. Essentially, mining decodes virtual problems through computers and their specially designed hardware.

“I think it’s becoming less and less profitable because of the energy you put into the actual mining process,” computer programming teacher Ramsey Young said. “The process is not worth it. You will see more money spent on your equipment and electricity than you will learn. Now, students like to do it because they say ‘It’s not my power,’ but they’re spending their parents’ money to make themselves a little less.”

Power consumption is one of the major costs of mining bitcoin. Asic cards, built for mining energy efficient much faster, (1500 gigahash) gives the power to mine. Every time a solution is found, successfully mined, it’s rewarded by bitcoins. The difficulty of problems and reward amount vary with the network. These bitcoins are then stored in a virtual wallet that can send and receive bitcoins.

“Since I’m running off free electricity, in the span of about a month I’ve made $130,” senior Aaron Vigal said. “It runs 24/7, all automated. I don’t trade it or sell it. I’m just saving it up in a wallet right now, and eventually I’ll convert it to dollars.”

A single bitcoin is equal to 15,991.35 US dollars. Bitcoins can be divided down to 8 decimals (0.00000001). Theoretically if you were to buy a packet of gum, you wouldn’t need to get $15,990 in change. A website called Bitcoin Exchange allows miners to sell their online currency to their prefered local currency.

Many people are losing out from this young and volatile market. However, others have profited from getting involved early through stocks including senior William Rodriguez.

“I invested about $280 into it, and it gave me roughly $1,700 in bitcoin when I sold it the other day,” Rodriguez said. “Now, I hold that much money in bitcoin and will be reinvesting it into other start up cryptocurrencies to hopefully have that same return.”

Within months of the startup of cryptocurrency the impacts of this was seen. It’s been a cheaper, easier and quicker way to spend money across national borders.

The currency became a popular form of payment through millions of shady Silk Road, or black market, interactions due to the complete lack of government control. Engaging in such a thing will send the purchaser into a long, involved and expensive legal fight when they’re caught. It’s not easy to track for taxes, and this worries the government.

However, it’s not all sketchy business. The acceptance of this payment is progressing among stores, and some universities allow tuition payments through cryptocurrency.

Due to the amount of bitcoins not changing yet the plentiful transactions happening, this will surely cause problems down the road.

There is so much uncertainty around this topic. Some people believe this is the future. After all, copious amounts of everyday transactions are becoming digitalized from kiosks at movie theatres, to an amazon button with a single push can deliver crates of Cheez-its straight to your door.

Others, however, are terrified it will destroy our economy.

Both sides agree that if this online currency manages to work and cut out the taxing middle man then the way the economy functions could transform for the better.